West Should Stay out of Russia's Debate on Economic Reform

The drama of Russian reform was given a roadshow performance
at the 1994 World Economic Forum just concluded at this resort
town. Western-trained, market-oriented Russian reformers made their
case against the more conservative Russian economists who now have
taken control of policy in Moscow.

Russia's new prime minister, Viktor Chernomyrdin, traveled to
Davos to answer them and to respond to the criticisms of former
Western advisers to the Yeltsin government.p The argument was more
nuanced and the outcome less transparent than some accounts have
made out.

The reformers accuse their rivals of having carried out an
"economic coup d'etat" and say that the new government's programs
will bring about hyperinflation in Russia by mid-summer. Prime
Minister Chernomyrdin denies this, saying Russia must be stabilized
but must also continue economic reforms. He said the country cannot
turn back, but it also cannot slavishly copy a Western model that
rests on assumptions irrelevant to Russian conditions.

"We will look after ourselves," he said. He also warned,
ominously, "Don't look down on Russia."

Chernomyrdin's speech on Sunday was understandably defensive.
The Western press interpretation of the Russian reform struggle,
and the reactions of the business and political leadership gathered
in Davos, all but unanimously have held the Chernomyrdin approach
wrong, if not perverse, and the young reform leaders - Yegor
Gaidar, considered the architect of the previous reform policy, and
Boris Fyodorov, former finance minister - clearly right.

Another young Russian, a new entrepreneur, remarked to me that
neither Gaidar nor Fyodorov had ever before run anything beyond an
academic or banking seminar. The policies they have tried to apply
in recent months are those of the Western academic consensus and
reflect what Western business people believe. They rest on the
conviction that radical privatization of state enterprises, a
total opening to market forces and tight monetary controls are the
only way for Russia to construct an economy that works and will be
able to compete internationally. …

The rest of this article is only available to active members of Questia

Print this page

While we understand printed pages are helpful to our users, this limitation is necessary
to help protect our publishers' copyrighted material and prevent its unlawful distribution.
We are sorry for any inconvenience.